Dramatic falls in cost are making renewable energy competitive with fossil fuels across the world, and the least-cost option in a growing number of markets.For example, solar energy has already become cheaper than diesel generation, with clear benefits for communities in areas far away from the electricity grid. The public debate around renewable energy, however, continues to suffer from an outdated perception that renewable energy is not competitive, forming a significant and unnecessary barrier to its deployment.

Renewable Power Generation Costs in 2012: An Overview, covering around 8,000 renewable power generation projects, shows that the cost of renewables is continuing to fall. Renewables are increasingly the most economic solution for new grid-connected capacity, and where oil-fired generation predominates (e.g. on islands, off-grid and in some countries), a lower-cost renewable solution almost always exists.

The rapid deployment of renewables, working in combination with high learning rates, has produced a virtuous circle that is leading to significant cost declines, and helping to fuel a renewable revolution.

Rapid growth in the deployment of solar and wind is driving a convergence in renewable electricity generation costs at low levels. This trend will continue in the short- to medium-term, but to what extent is still uncertain.